A division uses a regression in which monthly advertising expenditures are used to predict monthly product sales (both in millions of US dollars). The results show a regression coefficient for the independent variable equal to 0.8. This coefficient value indicates that:
- The average monthly advertising expenditure in the sample is US $800,000.
- When monthly advertising is at its average level, product sales will be US $800,000.
- On average, every additional dollar of advertising results in US $.80 of additional sales.
- Advertising is not a good predictor of sales because the coefficient is so small.
Answer(s): C
Explanation:
The regression coefficient represents the change in the dependent variable corresponding to a unit change in the independent variable. Thus, it is the slope of the regression line, represented by b in the linear equation y= a + bx.